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d1800978
Community Member

Is reimbursible contract an open cheque?

We'd awarded a contract to 1 engineering company after accepting their offer of 190 hours + 100 risk hours to complete a job. A company informed that 100 risk hours are required to safeguard their interest in the event more hours are required to finish the work. The company also refused to work on fixed term basis.
Until this day, the company has charged us between 290-300 hours (amounting to some 10000$) and work completion is nowhere close to sight.
I asked them to stop further booking and honor their commitment to accomplish all pending work. In return they came back informing they can't work for 'free'.
They are asking for 100 more hours but at the same time are also informing that few of the tasks (which is critical to successful completion of this project) are excluded from these 100 hours and it can't be ascertained at this stage as to how many hours it'd take to complete those tasks. In principle, the company is asking for an open cheque.
All this has led to delays in project delivery which inturn has forced us to keep deferring the project launch date.

Would Upwork be able to intervene and help us on this matter?
ACCEPTED SOLUTION
petra_r
Community Member

You say you hired a company on an hourly contract...

That is not actually possible. You can only have hired one or several freelancers on hourly contracts because companies are not allowed to share hourly contracts between several people, it is a terms of service violation even with the client's knowledge and consent.

 

Take a look at the work diaries. Are all the hours tracked with the tracker (NOT manual time.)

 

Did you officially hire one person only or did you have several people hired each with their own contracts? How many people, to your knowledge, worked on your project?

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21 REPLIES 21
prestonhunter
Community Member

re: "Would Upwork be able to intervene and help us on this matter?"

 

Why do you need Upwork to intervene?

 

If you want to grant them an "open cheque", then YOU ARE ALLOWED to do that.

 

If you do NOT want to grant them an "open cheque," then you DO NOT NEED to do that.

 

You may close the contract at any time.

You are under no obligation to continue working with these people.

Thank you for your reply.
The contract was for developing a physical prototype. All the agreed 190 hours + 100 risk hours (amounting to 10000)$ have been spent until now but even the design is not yet finalised.
If I close the contract now then all the spent time & money would be lost and I wouldn't have the prototype either.
would it make sense to close the contract in such a scenario? Or is it that i'm missing out on something that you are trying to convey?

Majid:

 

I'm not sure what you mean when you say that all the time and money would be lost.

 

ALL OF THE WORK that has been done thus far belongs to you.


Nothing is "lost."

 

If this is an hourly contract, then it means that every bit of work that was done under the contract belongs to you. Regardless of what happens in the future, all past work that you paid for already belongs to you.

 

I'm simply pointing out that clients have ZERO RESTRICTIONS when it comes to closing a contract. Clients may literally end a contract at any time.

 

You are free to contnue working with the current freelancer or agency for as long as you want to.

 

Or you may bring in other freelancers to work on the project alongside the current team.

 

Or you may stop working with the current team and continue working only with other freelancers.

 

If you do not want to continue working with the current freelancer or agency or group of freelancers, then it would be your choice to hire other people to continue working with what has already been developed.

 

This is all up to you. What exactly is it that you want Upwork to do? Upwork is not a party to this contract.

Thanks again for the quick response.

If the company is not honoring it's commitment of executing the project within agreed budget/ timeframe then in my opinion they are not complying to Upwork's T&Cs.

In such a scenario, can't upwork intervene and mediate a solution out between both parties?

Engaging a new contractor at this intermediate project stage will not be the best option as it'd lead to further time wastage.

re: "If the company is not honoring it's commitment of executing the project within agreed budget/ timeframe then in my opinion they are not complying to Upwork's T&Cs."

 

I do not doubt that you feel that way.

 

Upwork itself may disagree.

 

If you are using an hourly contract, then you are paying for the freelancer's time. You are not paying for a specific deliverable.

 

re: "In such a scenario, can't upwork intervene and mediate a solution out between both parties?"

 

You can ask.

 

But asking Upwork to intervene in the development of your software system is not the key to success.

 

Upwork is not a software development company.

Upwork's purpose is to help clients find freelancers to work on their projects.

 

Upwork will not be able to force the freelancers you hired to finish the project.

 

BUT: It IS POSSIBLE to contact Upwork Customer Support and ask them to help you communicate with the freelancer. Upwork employees DO INDEED help mediate between clients and freelancers.

 

is this the ideal solution to your situation?

 

No, not really.

 

Your problem is that you do not have a good, independent project manager (PM) working for you.

 

You allowed the lead dev on the freelancer team that you hired to serve as the PM.


That was a mistake.

 

If you want to move forward successfully on this project, you need to have a good, independent PM on your side.

 

Upwork WILL NOT SERVE AS YOUR project manager.

Only about 20% of lead devs can serve effectively as PM.

 

Is YOUR lead dev in that 20%?


Or is your lead dev one of the 80% who can NOT?

 

(I already know the answer to this question.)

petra_r
Community Member

You say you hired a company on an hourly contract...

That is not actually possible. You can only have hired one or several freelancers on hourly contracts because companies are not allowed to share hourly contracts between several people, it is a terms of service violation even with the client's knowledge and consent.

 

Take a look at the work diaries. Are all the hours tracked with the tracker (NOT manual time.)

 

Did you officially hire one person only or did you have several people hired each with their own contracts? How many people, to your knowledge, worked on your project?

lysis10
Community Member

To add to what Petra said, if they are using manual time and you decide to continue with them, I would start requiring them to use Tracker. If no tracker, then require them to fill out some kind of thing that explains what the time is for along with some kind of proof of progress that matches their claim. I don't blame you for getting angry at such a terrible estimate. This is why I always over estimate, although this kinda ticks clients off sometimes too because they think there is no way it should take me that long. Usually, they are right but I like to CMA. It could be they are running into issues that they aren't telling you.

d1800978
Community Member

Hello Jennifer,

Yes i agree with your approach. It's possible that manhour estimation during project bidding can go wrong. That's the very reason the company had considered 100 'underestimation risk' hours while bidding and we had even agreed to it. The issue now is that the regular hours as well as the underestimation risk hours have been exhausted and we are nowhere close to completion. And moreover the company is still not willing to disclose how many more hours would be required. Hence my question (is reimbursable contract an open cheque?).

d1800978
Community Member

Hello Petra,

In my case, multiple freelancers (belonging to same company) have indeed worked under single contract. Out of the nearly 300 hours that have been claimed until now, majority were under 'manual time added' catgegory.

There are 2 contracts ongoing and atleast 3 freelancers (to my knowledge) are working on these 2 contracts. All 3 freelancers work for the same company and are housed under 1 roof at their work location.

 

Meanwhile, thanks for being of genuine help (unlike others who use this community forum to do cheap self-promotion)

re: "Meanwhile, thanks for being of genuine help (unlike others who use this community forum to do cheap self-promotion)"

 

Majid:

I'm familiar with the Upwork users who are participants in this thread.

And I have read what all of them have written here.

I can assure you that all of them are only interested in helping you.

 

(I'm not so sure if that's the case with the freelancers you hired.)

petra_r
Community Member


Majid K wrote:

 

In my case, multiple freelancers (belonging to same company) have indeed worked under single contract. Out of the nearly 300 hours that have been claimed until now, majority were under 'manual time added' catgegory.

There are 2 contracts ongoing and at least 3 freelancers (to my knowledge) are working on these 2 contracts. All 3 freelancers work for the same company and are housed under 1 roof at their work location.


This is a big fat violation of the terms of service and you need to contact Upwork immediately.

In your case I would request dispute mediation (which will, however, likely only look at the hours logged during the last 30 days, but in the case of the violations in evidence, might go further.)


This will give you a degree of leverage you can use as the basis of negotiation with the agency.(rather than a genuine "Gimme my money back!" )

 

Manual time is not protected and you'd win any dispute for all manual hours in the previous 30 days, but I would suggest you use that as a bargaining chip / basis of negotiation to stop that agency 1) violating the terms of service and 2) doing their bait-and-switch thing..


Your project should have been done as fixed price if various people are working on a fixed deliverable.

 

d1800978
Community Member

Hello again Petra,
I've contacted the company asking them to discuss and come to a solution. It's been almost a day but they haven't reverted. Also this thread has caught attention of 1 of the upwork moderator, so i'm hoping a mediation would happen soon.
Whatever has happened has happened. All that i'm now looking for is a successful and peaceful completion of this project.

Thanks to all for the support.

Hi Majid,


Our team will reach out to you via ticket where you can share more evidence with us. Our team will investigate this and assist you further as well directly on your ticket. Thank you.

~ Goran
Upwork
kat303
Community Member

To add on to what's already been said,: 

On hourly contracts a client pays for the hours a freelancers logs in using Upwork's Tracker and not for the work produced. That doesn't mean you can't get your work. It is perfectly within your rights to ask for all or any work produced every XX days. If you don't received the actual work done then you should pause the contract until you do receive the work.And if things are not going as planned, you can cancel the contract at any time whether you have a reason to or not.

 

For hourly contracts you do not have to pay for manual hours entered, screen shots showing the freelancer was doing something else instead of working on your project. (providing they used the Tracker) and you can also dispute screen shots where there are not meaningful notes entered. 

I sincerely want the original poster - and all clients - to succeed with the projects.

 

But Upwork is not like a vending machine into which a client can put some money, and out comes a finished project.

 

Upwork does not provide custom software or graphic design or any other type of product. Upwork facilitates clients finding freelancers.

 

A client must still manage a project - or hire somebody to manage the project (such as a project manager).

Hello Preston,

Please note my project is not related to information technology. It's for a mechanical product development.


Preston H wrote:

But Upwork is not like a vending machine into which a client can put some money, and out comes a finished project.


Everyone is well aware of that, Preston.

 

I understand where you're coming from with your "Oh, it's not a problem, just start over with someone else and it's your own fault because you mismanaged your contract" attitude.

 

That is indeed all well and good from your point of view, your own client projects are tens of dollars, not 10 thousand dollars like in this case, and being lectured how he did it wrong isn't helping the OP move forward. It is, of course, a lot easier to walk away from a contract worth $ 40 than $ 10 000.

 

He may well have some leverage against the agency, who, if the OP's account is accurate and complete, appear to be breaking Upwork's ToS by running a multi-people project through an hourly contract and may have indulged in a game of bait and switch when it comes to the hours/price.

 

Petra:

I don't doubt that you are interested in helping the original poster.

 

This thread is about his situation, and has nothing to do with my own hiring history as a client. (I'm not sure how that is relevant.)

 

My advice here is focused on helping the original poster. But as always, given the fact that this is a public forum, our posts can be instructive for other people reading these threads.

 

I don't think the original poster is in any way dishonorable, but there is no getting around the fact that mistakes were made. If others can learn from what has happened here, that's a good thing.

 

The fact that a large amount of money has been invested in this project IS a key aspect of this situation. Nothing I have said in this thread was meant to convey the idea that the client should just walk away from the work that has been done. That is the opposite of what is actually in my posts here.

 

In any large project, it is important for a client to organize the work in a MODULAR way. This means that money spent on the project should go toward creating usable, complete steps or modules.

 

No client should spend $10,000 and not have anything to show for it.

 

Each chunk of money that is spent should result in steps or modules that a client can look at as complete in and of themselves, and which can be used toward reaching the end goal.

 

The original post in this thread indicated a "binary" way of thinking... an "all or nothing" way of thinking, which is counterproductive to success.

 

I HOPE that the original poster's management of this project was sufficiently non-binary in such a way that the work done by the freelancer or group of freelancers is usable and productive regardless of what happens in the future.

 

I don't doubt that the original poster wants to continue working with the current team of freelancers because he feels that this continuity will faciliate finishing the project sooner. That's always a consideration, but no project of this size should plan on such continuity as a certainty. Projects of this size should always be managed in a progress and modular way so that the project can survive possible personnel turnover. This makes the project design inherently better and it makes the work more maintainable in the future.

 

The original poster pointed out that this project is NOT developing a software system, but is developing a physical prototype.

 

I understand that.

Some of my wording in some of my posts here may be imprecise when applied to his specific project, but the basic principles apply to all types of projects that are this large.

AveryO
Community Manager
Community Manager

Hi Majid, 

I was unable to identify the contract you are referring to on your post. I would appreciate it if you can send me more information through a private message I will go ahead and look into this further.


~ Avery
Upwork
d1800978
Community Member

Hello Avery,

Thanks for your willingness to assist. I've sent you a private message wherein i've provided as much details. If you need any other info, please let me know.

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